Recent Changes in GST on Goods Transport Services (GTA)

With effect from 13th July 2022, Vide Notification No. 11/2017- Central Tax (Rate)  has been amended and is replaced with Notification No. 3/2022- Central Tax (Rate). The change in the chargeability of GST on the GTA services will take effect from 18th July 2022.

The latest provisions are as follows: 

The services (including used household goods for personal use) relating to the transportation of goods supplied by the Goods Transport Agency (GTA) is covered under this Notification. 

There are Two Options now for GTA to Choose From:

1. Reverse Charge 

2. Forward Charge

Reverse Charge:

In the case of Reverse Charge, the Goods Transport Agency chooses its services to be taxed under reverse charge and doesn't exercise any option. The recipient of the Services is liable to pay GST at the rate of 5% under its provision.

Forward Charge:

There are two options provided to Goods Transport Agency Under Forward Charge, Namely:

1. Forward charge at the rate of 5%, where no ITC will be available if the services are supplied at this rate.

2. Forward charge at the rate of 12%, where ITC will be available.

Exemptions that have been removed for GTA:

The below exemptions, available to GTAs, have been removed because of the amendment in Notification No. 12/2017 - Central Tax (Rate) 

1. The consideration charged for transportation of goods in a single carriage does not exceed one thousand five hundred rupees;

2. A single consignee cannot be charged more than rupees seven hundred and fifty for the transportation of such goods. 

Notification no. 4/2022 Central Tax (Rate) dated 13th July 2022 removed the two exemptions above with effect from 18th July 2022. GTA is now liable for taxation depending on whether it exercises the reverse charge or forward charge option for any value of supplies made by it.

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